In preparation for next weeks lecture on substantive procedures related to the balance sheet please review Chapter 11.2.2 and address the following question on internal controls over inventory counting. Victoria Bottle Company (Bottle) manufactures bottles in its plant in the Highlands. Bottle uses a large furnace to melt the glass to form the bottles. Because of the cost and time associated with starting and stopping the furnace, Bottle procedures a smaller volume of bottles per hour, but maintains its operations continuously throughout the year. Next to the plant is its warehouse holding its raw materials and finished goods. Bottle has a March 31 year-end and counts its inventory on that day. The finished bottles are stored in 15 aisles in the warehouse and the raw materials, including sand, are stored in piles at the opposite end of the warehouse. Bottle has adopted the following inventory counting practices: The warehouse manager oversees the count due to his familiarity with the finished goods and raw materials. There are 8 teams of counters with 2 people on each team. One team member is from the manufacturing department and the other from the finance department. Other than the manager, no other warehouse staff are involved in the count. Each team counts an aisle of finished goods by counting up and then down each aisle. As this process is systematic, it is not felt that the team will need to flag areas once counted. Once the team has finished counting an aisle, they will hand in their sheets and be given a set for another aisle of the warehouse. Bottle has hired a private company to perform test inventory counts to ensure that the count procedures are being followed after they have finished counting inventory with the other teams. The count sheets are sequentially numbered, and the product codes and descriptions are printed on them but no quantities. If the counters identify any inventory that is not on their sheets, they are to enter the item on a separate sheet, which is not numbered. Once all counting is complete, the sequence of the sheets is checked, and any additional sheets are also handed in at this stage. All sheets are completed in ink.